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Monday, March 16, 2015

The Clean Power Plan and Grid Reliability: Fostering the Transition to a Modernized Transmission System

By Amelia Schlusser, Staff Attorney

The debate over the potential impacts of EPA’s proposed
Clean Power Plan on grid reliability is gaining steam. Critics contend that the
proposed rule calls for hasty and drastic changes to the nation’s electricity
resource mix, which will result in widespread retirements of coal-fired power
plants and increased deployment of renewable resources. The reliability debate
centers around the fact that baseload resources, such as coal plants, provide
stable and predictable electricity, while renewable resources, such as wind and
solar power, provide variable and intermittent power. Therefore, the argument
goes, replacing coal plants with variable renewable resources may jeopardize
the reliability of the electrical grid.

The reliability debate first made headlines following the
release of the National Energy Reliability Corporation’s (NERC) Initial
Reliability Review of the Clean Power Plan, which voiced concerns that
the rule could compromise the reliability of the power grid. NERC’s report
recently made headlines for a different reason. According
to Greenwire, the Energy and
Policy Institute recently criticized NERC for failing to disclose that Energy
Ventures Analysis, a contractor that worked on the NERC report, had ties to a
coal technology company. However, there is little evidence that this potential conflict
of interest actually influenced NERC’s findings regarding reliability impacts.

Meanwhile, politicians, regulators, and industry representatives
are becoming increasingly vocal on the potential reliability impacts of the
Clean Power Plan. On March 11, regulators from Wisconsin, Wyoming, and Indiana told
the U.S. Senate Environment and Public Works Committee that the proposed rule
would threaten grid reliability in their states. According to Greenwire’s coverage of the committee meeting,
the commissioner of the Indiana Department of Environmental Management, Thomas
Easterly, noted that he was very concerned “that we will see some catastrophic
results somewhere in the implementation of this plan.” Senator Jim Inhofe
(R-Okla.) also argued that the rule would threaten the reliability of the grid.
Jeff Burleson, Vice President of System Planning at Southern Company, recently issued
a statement asserting that the Clean Power Plan will jeopardize grid
reliability. Burleson claimed that the
rule would “potentially put serious reliability and operational pressures on
the grid,” and that “it does so under the guise of ‘environmental compliance’.”

NRDC’s John
Moore argues that the reliability argument is a bluff intended to reduce
utility compliance obligations under the Clean Power Plan. Moore’s blog
specifically focuses on Southern Company’s claim that the rule will jeopardize
grid reliability, which is not the first time the utility has made this
argument in response to new environmental regulations. Moore points out that in
2011 Southern Company argued that EPA’s mercury and air toxics standards would
cause “numerous rolling blackouts” starting in 2015. In 2014, however, the
company stated that it was 98% in compliance with the standards, and as of
2015, the rolling blackouts have failed to materialize.

It’s unclear whether the Clean Power Plan’s critics are
intentionally crying wolf by asserting that the rule is incompatible with the
reliable delivery of electricity. However, it is clear that these reliability
challengers are failing to fully consider available technologies and strategies
that utilities and grid operators have successfully implemented to maintain
reliability under high penetrations of renewable generation.

The reliability challengers are also overlooking the energy
sector’s ability to develop innovative solutions to respond to grid reliability
constraints. Utilities are investing in smart grid improvements and other
technologies to facilitate integrating renewable energy onto their systems. For
example, one of my previous
posts discussed how Idaho Power Company developed and implemented a new
forecasting tool that has improved the utility’s ability to integrate wind
energy onto the grid at a cost savings of approximately $100,000 a month.

Grid operators throughout the nation are also developing
strategies to integrate increasing amounts of renewable energy onto the grid
without impacting reliability. For example, Columbia
Grid and Northern Tier Transmission Group initiated a Wind Integration Study
Team, which in turn created a Dynamic Transfer
Capability Task Force to assess the potential impacts of increasing dynamic
transfers of electricity between balancing areas to integrate variable
renewables and maintain grid reliability. And a recent report
by Navigant Research estimated that utilities would spend $107 billion
through 2023 on “synchophasors and wider-area situational awareness systems”
which enable grid operators to collect and transmit data and rapidly identify
grid disturbances before outages occur. These innovative grid improvements help
maintain reliability and functionality, and according to the North American Synchophasor Initiative, these
technologies provide significant benefits for integrating intermittent
renewable resources.

These examples describe only a few of the countless efforts
to improve and modernize our national grid systems to accommodate the evolving
U.S. energy mix. These efforts help to demonstrate the electricity sector’s
ability to proactively address emerging system constraints and develop
innovative strategies to maintain grid reliability. Once finalized, the Clean
Power Plan will shift the composition of the electricity generating mix in the
country. However, this shift will be supported by the deployment of advanced
grid technologies and innovative operational strategies that will ultimately
improve the functionality of the grid and help facilitate the transition to a
clean, sustainable energy system.